Wednesday, April 8, 2015

When the Carrot Becomes the Stick: Who Will Preserve San Francisco's Heritage?

I recently spent a week with my family in San Francisco, my
first visit since 1999.At that time,
the city’s real estate market was heating up as a result of the late 1990s tech
boom in nearby Silicon Valley.If the
market was hot back then, it’s absolutely scorching today, for largely the same
reason.Conversations on streetcars, at
parties, and in shops and restaurants - among recent and long-time residents
alike - centered on $3,500 one-bedroom apartments and cash-purchases of million
dollar townhomes.[2]Even the unprecedented California drought
(entering its fourth year) and the city’s alarming homeless crisis (approaching
8% of its residents) took a backseat to real estate chatter.

During my visit, I was reminded that 80% of the city’s
buildings were destroyed during the unmatched earthquake of 1906.As a result, the city has a relatively
“young” building inventory when compared to the 18th and 19th
century cities in places such as the American northeast, and to the even older
building stock that exists in European cities.Nonetheless, many buildings are older than the 50-year-old measuring
stick applied by U.S. preservationists when assessing eligibility for listing
in the National Register of Historic Places (and, by extension, for
rehabilitation tax credits (RTCs)).

Building renovations and “tear downs”[3] abound,
with seemingly little consideration for historic (or even civic or cultural) significance.
Pre-war structures are routinely masked
by character-shifting facelifts, creating increasingly homogenized streetscapes
in many neighborhoods.In commercial
districts, storefront openings are scraped clean, replaced by less appropriate new commercial
units.While there certainly are plenty
of solid examples of urbanism throughout the city (my family did not use a car
all week), its 20th century architecture is under siege, and no one
seems much bothered by it.Out with the
old, in with the luxury.

The federal RTC - a critical budget-gap-filler in places
like Rust Belt cities – would be a mere windfall in San Francisco[4],
with residential rents rivaling stratospheric New York City’s and downtown
office rents approaching $100 per square foot.At those rents, a building will pay for its own renovation costs,
without resorting to government incentives.And therein lies the rub for preservationists: when their most effective
“carrot” - the RTC - is more of a hassle than a feasibility indicator, how do
you prevail upon developers and homeowners to honor the historic significance
of their buildings?

The simplest answer may be that you don’t, at least for
now.When the carrot becomes the stick,
even the silliest rabbit will avoid it.But if the drought endures, and the tech market crashes (again), and the
homeless population reaches a tipping point, and healthy urban density becomes
overcrowding, then people will leave the city, and rents will drop
correspondingly.And then rehabilitation
activity that once paid for itself will require the same incentives currently
relied upon by San Francisco’s less affluent American counterparts.

Are preservationists being reduced to
ill-wishers, hoping for the economic demise of a place just so that we can
regain some influence over the direction of its historic resources? I certainly hope not, but what alternatives
are there to preserve and honor beautiful, historic cities like San Francisco? Stand-by preservation tools – historic
districting[5], preservation
ordinances, conservation easements[6],
civic responsibility/shame – likely will be ineffective in those places, where
demand for shelter far outstrips its supply.
Until the carrot returns to being the carrot, preservationists may, in
fact, be reduced to hoping against hope.

[1]
Jason Yots is a tax credit attorney and the President & CEO of Preservation
Studios, a Buffalo-based historic preservation consulting firm. www.preservationstudios.com

[2]
Almost impossibly, the city has added nearly 95,000 new jobs, but only 10,000
new housing units, in the last five years, creating ever-increasing pressure on
commercial and residential rents and on home prices.

[3] The
phenomenon of acquiring a serviceable building, tearing it down and replacing
it with a much larger new building.

[4] If
it’s even accessed at all: in 2014, only four “Part 2” approvals (the
government’s indication that a project’s design is RTC-worthy) were issued in
the entire state of California.

[5]
There are several local, state and National Register-listed historic districts
in the city.Based on the RTC
statistics, the NR districts are not generating RTC activity (they otherwise
have no teeth).Local districts afford
cities and citizens the most participation in historic resource decisions.I could not locate (low-hanging) data
indicating whether San Francisco’s are largely honorific, or if their
preservation laws are actively enforced by a (staffed) commission with (binding)
jurisdiction.

[6]
San Francisco Heritage, the city’s preservation advocacy charity, has collected
only 60 preservation easements since 1974.Not shabby, but not game-changing in a city the size of San Francisco.

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